By Shuli Ren

China:

China tightens rules on shadow banking. Measures include asking banks to set up separate subsidiaries and provide capital for wealth management, and banning banks to use proceeds from these products in interbank loans.

U.K.-based emerging markets specialist Ashmore Group is allowed to invest in mainland’s A-shares market under the Renminbi Qualified Foreign Institutional Investors (RQFII) program, the first group outside Asia to be granted such a license. RQFII gives investors almost complete freedom to invest in the Chinese markets.

Meanwhile, China’s Qualified Domestic Institutional Investor (QDII) program, designed to allow the Chinese to invest overseas, is not doing so well. Funds under QDII only totaled 58 billion yuan in the third quarter last year, down from 111 billion yuan in 2007. Chinese investors would rather invest at home, in assets they know.

Real rose 0.6% as concerns over Brazil’s credit downgrade eases. Moody’s said Brazil’s GDP growth would have to be much lower than 2% before a downgrade kicked in. Analysts expect Brazil to grow 1.95% this year. The Bovespa Index advanced 0.5% this morning.

The JSX Composite Index fell another 0.6% ahead of the Bank of Indonesia‘s meeting on Thursday.

Copyright 2016 Dow Jones & Company, Inc. All Rights Reserved

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our
Subscriber Agreement
and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit